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MetLife Resumes Buybacks With Its Largest Ever, for $3 Billion

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November 10, 2016

By Leslie Scism

MetLife Inc. said its board has approved $3 billion for share repurchases, following a halt in its program to return capital to shareholders as it planned for a divestiture of slower-growing, more capital-intensive businesses.

The nation's biggest life insurer by assets put its buyback program on hold in early 2016 as it worked to hive off about a quarter of its $952.9 billion in assets into a new company. The spinoff, to be called Brighthouse Financial, is expected to take place as early as the first quarter. In halting buybacks, MetLife said it couldn't buy back shares while it had material nonpublic information related to divestiture planning.

The New York insurer said its board's approval of the fresh $3 billion allocation is its largest ever.

The divestiture is motivated by both strategic and regulatory reasons. The remaining MetLife will focus on higher-return businesses, including insurance sold to employers for benefits' programs and international life-insurance operations. One benefit of the divestiture is that the smaller, new company is expected to avoid potentially stiff regulation as a "systemically important financial institution" by the Federal Reserve, allowing it to better compete with rivals.

MetLife was tagged a "SIFI"in 2014 but successfully challenged it in federal court, winning a ruling that is now under appeal by the government.

From 2000 through 2008, MetLife's board periodically approved $1 billion buyback allocations, then halted the activity amid the global markets meltdown of late 2008. The company resumed buybacks in 2014 with a $1 billion program, followed by a $1 billion allocation in December 2014 and a $739.3 million allocation in September 2015, before the halt for the divestiture.